Artificial intelligence is no longer just a strategic buzzword in the consumer goods industry. It’s a tangible driver of value creation, innovation, and competitive advantage.
Over the past year, AI agents powered by large language models (LLMs) have profoundly reshaped the consumer experience, engaging customers through human-like interactions. LLMs now directly influence up to 20% of purchasing decisions, redefining how consumers discover, compare, and choose products.
Yet despite the potential of AI to enhance value creation by as much as 800 basis points, according to BCG research, most companies aren’t making the most of the technology. Agentic AI is a telling example: only 10% of consumer goods and retail companies have successfully integrated AI agents across their teams and workflows.
Consumer goods companies that hesitate to adopt AI aren’t just missing an opportunity to reallocate cost savings into brand building and technology investments. They also risk losing the competitive edge to firms adopting an “AI first” mentality—organizations that are becoming more innovative, resilient, and relevant as a result.
Transformative AI in Action
One leading global beauty brand exemplifies what can be achieved when a company fully embraces AI’s potential. The brand’s customer insights showed that, due to the huge number of products on the market, 70% of customers feel overwhelmed by decision paralysis.
BCG worked with this brand to develop a first-of-its-kind agentic AI that leverages millions of unique data points to deliver a highly personalized consumer experience. The agent draws on information about more than 750 products and a library of 150,000 dermatologist-annotated images to generate tailored recommendations.
At the same time, the agent gathers valuable insights from user interactions, capturing nuanced consumer preferences and sentiments expressed during chats, all while ensuring user privacy.
The result? A cost-effective, always-on consumer touchpoint that deepens customer relationships and enhances brand loyalty.
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Why It Matters
Over the next three years, agentic AI will increasingly become a cornerstone of consumer interactions, fundamentally altering how products are discovered and purchased. Consumers will not only want personalized experiences from brands—they will expect them.
For consumer goods companies, the message is clear: those without an explicit, AI-first strategic roadmap risk falling significantly behind their competitors. Leading companies aren’t just thinking about consumer-facing AI-enabled executions—they’re looking to reshape end-to-end functions and workflows across each part of the business. And they’re hiring top talent for roles that rely on judgement, strategic insight, and human-agent collaboration.
Consumer products companies taking full advantage of AI also tend to set aside dedicated funding for AI initiatives, typically allocating around 20% of their organization’s IT budget, with business units given autonomy to own and deploy AI solutions with increased speed and independence.
An AI-first model supports innovation across the product lifecycle, from the ideas stage—where AI can speed up the insights-to-innovation process by up to five times—to the evaluation stage, where AI can provide leadership with product performance analysis up to 60% faster.
To learn more about building AI-first, market-leading consumer goods strategies, click here.
